the lack of inflation. i think this is something that's an overlay with this fed, the last fed i think this chairman needs toort of address it and get in his head a little bit about what the thinking is and why. liz ann said it before is the phillips curve dead and buried, still there or if it is dead and buried, why is it dead and buried and what are we looking at now to give us signals moving forward i think that's what the marketplace truly is or wants to be miopic on and has any type of ammo. >> in terms of market reaction, trader reaction, we noted the jump in financials that's no surprise we had just as strong if not a stronger jump in semiconductors up a percent off the back of the decision. >> people look for growth. when you look for growth, when you want the water you go to the beach. when you want growth you go to tech traders look at semiconductors and they have been on fire when you look at this when the fed tells you about growth, you go to where it's been in the tech space, specifically semiconductors recently. >> i have been watching the sectors flip through on the screen tech isn't up as muc

the fed gets optimistic for the fed. at the central bank are conceding that tax reform and other policies will provide at least some growth boost for a couple years the bottom line is the powell fed is continuing on the path set force by janet yellen as widely expected. he will be tested but not just yet. they talk about this idea they're optimistic that we can get the unemployment rate lower without triggering massive amounts of inflation it doesn't suggest that we are going to see any real policy mishaps, but that there will be a time down the line when jay powell will have to figure out how to react in certain situations >> 47 minutes past the hour now. we're approaching the top of the hour the team is getting ready for "squawk box. becky quick has a look at what's coming up. good morning >> good morning. great to see both of you it is a packed show. i know we say that every day, but we really mean it today. we'll talk about all the things you guys have been talking about, the fed impacts on the markets, what's happen

i went to the fed. i thought that the research i had done and the background i had were reasonable basis to contribute to monetary policy. during the time i spent there, and i'm sure you've had this experience, i learned a lot about the other responsibilities of the fed, including supervision and regulation, and some of the operational responsibilities that the fed has. i was delighted to be offered the opportunity to do it and learned a lot when i actually assumed the job. ben: when you were there, it was peak greenspan. what was it like working with alan? janet: i did work with alan. i went in 1994 and moved to the council of economic advisers at the beginning of clinton's second term in 1997. i didn't really know alan before i went. i really was impressed with his intellectual strength, with his originality, no one knew the data and understood the idiosyncrasies of the data and could make better use of it to provide insights on the economy than alan could. i thought he was a very original thinker. i e

i do have a question about the two roles of the fed. with that because a set of how you see the structure of the fed? >> yes. >> do you actually tracked the budget of the two activities separately? other people generally involved in regulatory activity and a different body of people involved in monetary policy? >> different divisions of do have different budgets and we do look at a more functional basis. it is pretty intertwined. we do call upon what we learned in a supervisory and regulatory state going to get a lot of input. and informs our monetary policy. i think our knowledge of transition mechanism -- there is quite a lot of intertwining their. re.the bill that we put together 4755. hr this up with the regulatory component of the federal reserve on appropriations which of the a compromised position because we could propose putting the entire federal reserve on appropriations. the purpose would be to focus on the regulatory side so the all the standard strings attached to an executive agency that is engaged in rulemaking applied to

the fed chairman, jerome powell, back on capitol hill. this time he is appearing before the senate banking committee. joining us now, michael mckee, , and also on capitol hill itself, kevin cirilli. michael, let me start with you. it was a market reaction, but nothing like we have seen in the past. there was a movement in treasuries and stocks, but we are back to where we were? if jay mike: we will see powell meant what he said. do you really mean to suggest that we are going to see a faster pace of rate increases? because you think the economy is growing faster? that's the bottom line question for people on the street. what will jay powell have learned from tuesday's market reaction that he might try to put into practice ira:? i think he did a pretty -- practice question mark ira: i think he did quite -- practice? ira: i think he did quite a good job. we didn't get a lot of new information, but the fact that he sounded a bit more hawkish surprised some people as opposed to it being significantly different. what i would like to hear today,

what is the fed ultimately going to deliver? y: the euro-dollar markets are basically pricing in two and a half to three rate hikes for the year. i think we should move to the market pricing for rate hikes, i doubt we get there. what it comes down is the random nature of it. three things cause inflation to exceed our forecast, core inflation. one is a change in methodology in used car pricing. it doesn't get much more random than that. i am willing to bet that on the flipside, we get some data over the course of the next six months or so that is randomly lower than expectations for small, meaningless reasons and it forestalls the fourth rate hike even if the markets price it in. jonathan: can we talk about the seasonality of some of the inflation as well? the break even curve is inverted. there is a seasonality to all of this when we start pricing in your term inflation pick up, every spring every year. r.j.: a goes back to 2010, the -- it goes back to 2010, the green shoots phenomenon. one of the things you have to consider on t

i think the fed is only going to move one more time this year. really throw the dots out the window. jonathan: what underpins this? mr. robertson: lack of inflation even approaching what the fed would like. pce continues to stay low and i think powell alluded to the fact that the forecasts are just forecasts. they are no better or worse than anybody else. i did find it intriguing when you look at the dots and you saw one who had a terminal rate of 480, i thought that was pretty impressive. but the bottom line is i think we will see the data to continue to be moderate and disappoint and i think that powell really laid it out that they made one move, one decision at this meeting, and it was to raise rates by five basis points, and everything else just gets made at a decision in further meetings. jonathan: for most people, there is no downside risk. not many people calling for one more this year. what do you make of that argument? ms. aronov: let me throw some stats out there. it's really interesting. over the past two years, from march of 2016 to ma

will the fed board of governors vote on whether to accept these plans? >> so we have delegated that approval to, i believe, to the head of supervision. but, of course -- force. >> to staff? >> but that will take place, i assure you, that will take place in serious consultation with the board. >> consultation but the board is not going to vote on this? >> that's not the plan >> well, you know, i don't understand this. the fed has issued a major unprecedented consent order against one of the biggest banks in the world and the fed board, the people who are actually appointed by the president and confirmed by the senate aren't going to vote on whether the order is actually being followed >> well, of course, we did vote unanimously on -- >> no, it's whether or not the order is being followed. because that's the big question here you know, in my view, staff is not good enough, chairman powell fed board members are supposed to make the big decisions and fed board members are supposed to be accountable for the decisions. will you consider requiring a vote of the

a rate rise at the fed, as expected. hawkish jay powell indicating another two hikes this year and more in the future. president trump expected to slap sweeping tariffs on china. shouting at beijing, not going to help. ♪ betty: david, as with every said meeting, we get some answers and many more questions to answer, and that seemed to be the status quo at this meeting. it seems certain to me, we will get more rate hikes this year. i want to pull up a chart, g #btv 4916. what is baked into the markets right now, still on the fence rateen three to four hikes, despite what we heard today from the fed. hikeis steepening rate path, what it means for 2019 and 2020. watching this press conference by jay powell, you got the sense of this is an economist talking, the ceo, and investor, talking about monetary policy. david: it was different, wasn't it? cohn, the terms he used, very interesting. a lot of people were watching for the language. what was surprising and he alluded to this, the 2019 and 2020 dots. 2019 at 2.9%, and 2020

we speak with the chicago fed president about the increases.r fed rate this is bloomberg. ♪ vonnie: you watching bloomberg markets. julie: it is time for etf friday. one area that has not seen the growth the rest of the industry has, alternative etf. why vanguard and a qr could change that. funds, talk about hedge one of these things is not like the other. vanguard does not. >> vanguard is an odd choice for this. i think this could be there next etf. be etf,on this could they launch these factor etf's. far of a step to go from momentum or multifactor to multi-neutral. it has real old volatility. it has no volatility. that is one thing missing is dirt cheap. the average fee from an alternative is 80 basis points. it would come in a quarter lower than average. >> what about a qr? you think there could be a launch. >> the first step towards filing etf's. they have a fund that is amazing. neutral in is up 30%. that is no volatility. that is mouthwatering for people looking for alternatives. now, but is nothing considering hedge funds have 3 trillion. high-octaneing is performance. >> thank

open the day after the fed. tty: we finally got the decision and is just after 6:00 in new york and we are looking at all the action on wall street and how it plays in the asia-pacific day. one story we are following in the market is the fed. its get straight to the top story. the federal reserve is raising rates hikes for 2019 and 2020 and not this year. kathleen hays is here with details of today's fed chair meeting. kathleen: this is a interesting meeting to parse because the fed did race its rate hike path which is caucus, but they didn't raise anything for 2018 even though they see faster growth and inflation growing. dot. hop onto the edre is what the dot look like. the three dots moved up, and here is what the three was, you have a consensus for four rate hikes. there was a lot more people under three, but now it is only two. moves up to three hikes, and so has 2020. isomberg research conclusion they left the door wide open for four rate hikes this year and what will let them walk through the door -- bloom

r.j.: a think it's consistent with where the fed has been. e she is viewed as a dove, i get that, i think we have seen janet yellen, she became less dovish by the end of her term, multiple tidings by the dovish core setting baton tone for the leadership going forward, which will be gradualism. i think this employment report is up their alley. inflation is building but slowly, average hourly earnings still ahead of the inflation rate and gradual monetary policy normalization, they can stick to that script. jonathan: momentum in the economy is picking up. what do you think the fed is theg to deliver versus front at end -- the front end at the moment? guy: the euro-dollar markets are basically pricing in two and a half to three rate hikes for the year. i think we should move to the market pricing for rate hikes, i doubt we get there. what it comes down is the random nature of inflation in the short-term. three things cause inflation to exceed our forecast, core inflation. one is a change in methodology in used car pricing. it doesn't get much mor

investors focus on the fed and the g20. remain on the facebook data scandal and driverless cars. the most famous prints from the saudi purge speaks to bloomberg exclusively on his 82 days in detention. i am francine lacqua in london. guy johnson is my coanchor for the week. it is fun. tom keene on a very well-deserved break. we look at the markets and the fed and a little bit of possible equivalency in the brexit debate and -- debate. s&p fair values on the according to a .3 percent rise. maybe we are putting what happened yesterday behind us. we down stuff 2700 -- bounced off 2700 yesterday. i feel like today is the day of market time. a lot of sound off your yesterday. tomorrow is when the action is. francine: a lot of focus on the fed and the g20. tariffs in china is our next topic. let's get to the bloomberg first word news. are we getting headlines? guy: i want to go to germany, my ego screen and figure out what's going on. i am more a fan of the efo, but we will do the zew. current survey, 90.7 and the fits aas 92.3,

conditions which means raising year olds which means by definition falling bond prices so the fed has also talked about the elevated valuations in the stock market certain fed governors have talked about price bubbles in commercial real estate which is back before trillion dollars in debt that are sitting on the banks hold and that. commercial mortgage backed securities are or are backed by and so you have various fed governors look at various. pricing or valuations out there and they're discovering and that's died and i study and i have a gun that discovering that after years of key and zero interest rate policy that asset prices have gone out of whack and so they're purposefully trying to lower them that's what that's what it means to tighten financial conditions make make it harder to borrow money bring valuations down a little bit and so they're you know that targeting asset prices with us and that's just by definition so the question is that you asked whether they can do that whether they can low asset prices without causing a lot of mayhem in the markets and i don't know you kno

r.j.: i think it's consistent with where the fed has been. e has been actively viewed as a dove, but i think we have seen former chair janet yellen, she became less dovish by the end of her term. multiple tightening's by the dovish core of the fomc, setting the tone for the leadership going forward, which will be gradualism. i think this employment report is up their alley. inflation is building, but slowly, average hourly earnings of 2.6%, still ahead of the inflation rate, and gradual monetary policy normalization. they can stick to that script. jonathan: and the momentum in the economy is picking up as well. r.j.: in the short term. jonathan: what do you think the fed will deliver versus what is priced in to the front-end of the moment? guy: the euro-dollar markets are basically pricing in two and a half to three rate hikes for the year. i am willing to bet we move to the markets pricing for rate hikes. i doubt we actually get there. what it comes down is the random nature of inflation prints three in the short term. three things cause infl

it was on the fed's radar. ook back at the tape, the markets started selling off on that, i believe yesterday we closed down marginally. it wasn't 600 points, and it came after the remarks. it was up 200 points intra-day. that's what you have here. this market is freaked on trade. it is literally on edge on everything about trade. the markets are saying no doubt, everybody and their uncle and i read some of the stuff that peter navarro put out there, trump's economic adviser, very tough on china. it takes an idiot to agree that china is looking to screw us every which way. but the market is saying something along the lines what the last guest said, there is a way of threading this needle with you don't use protectionism as a blunt instrument. the markets are worried about the blunt instrument. they don't know if the president knows how to use it as a -- knows how to negotiate his way around this stuff. that's what they're worrying about. maybe he does. maybe he doesn't. ashley: charlie gasparino. freaking out ab

conditions which means raising year olds which means by definition falling bond prices so the fed has also talked about the elevated valuations in the stock market certain fed governors have talked about price bubbles in commercial real estate which is back before trillion dollars in debt that are sitting on the banks hold and that. commercial mortgage backed securities are or are backed by and so you have various fed governors look at various. pricing or valuations out there and they're discovering and that's tied in a study and a half ago and that discovering that after years of key and zero interest rate policy that asset prices have gone out of whack and so that purposefully trying to lower them that's what that's what it means to tighten financial conditions and make make it harder to borrow money bring valuations down a little bit and so they're you know that targeting asset prices with us and that's just by definition so the question is that you asked whether they can do that whether they can low asset prices without causing a lot of mayhem in the markets and i don't know you k

r.j.: i think it's consistent with where the fed has been. has been actively viewed as a dove, i get that. but i think we have seen former chair janet yellen became less dovish by the end of her term. multiple tightenings by the dovish core of the fomc, setting the tone for the fomc leadership going forward, which will be gradualism. i think this employment report is up their alley. inflation is building, but slowly, average hourly earnings of 2.6%, still ahead of the inflation rate, and gradual monetary policy normalization. they can stick to that script. jonathan: and momentum in the economy is picking up as well. [speaking simultaneously] jonathan: you just want to -- what do you think the fed will deliver versus what is priced in to the front-end of the moment? >> that is a fascinating question. the euro-dollar markets are basically pricing in two and a half to three rate hikes for the year. i am willing to bet that we move to the markets pricing for rate hikes. i doubt we actually get there. and what it comes down is the random nature of

>> it's whether or not the order is being followed. staff is not good enough. fed board members are supposed to make the big decisions and fed board members are supposed to be accountable for these decisions. we consider requiring a vote for the fed board before these are approved? >> yes. >> the next is when the independent third party must review these before the end of september. will you commit to making that review public? rejecting confidential supervisory information necessary? i think the public deserves a chance to know how well it's working to fix the mistakes. >> i can't make that commitment to without discussing with my colleagues and staff. >> we urge your colleagues to consider making this public? >> if it can be made public. >> i'm find about redacting supervisory information. but my views giving all that wells has done the american public has a right to see. and all those customers were cheated have a right to see whether or not they're following through on the promises. you can see why some people might like lack confidence in the. >> if there's a

will the fed have to move more quickly than anticipated? obviously because the market has been doing so well for so long, there are a number of people saying how much is left on the upside. and is this the time to take some off the table. and final there are some technical reasons that might have driven some of the volatility. >> you oversaw the fed along with allen greenspan and the time of really important for the markets. allen greenspan always looked at the wealth effect. you focused on the wealth effect. as you look back on this last decade where any economic stimulus we talked aut was coming from the federal reserve, leaving interest rates at rock-bottom levels. it's time to get out of that, right? >> i think most of would agree it's time for the fed to start the process of normalizing. the question is the pace at which that need to be done. the fed kept interest rates low for longer than many people thought were wise. but today that has paid off in the sense the unemployment rate continued to come down and we haven't seen inflation cr

conditions which means raising year olds which means by definition falling bond prices so the fed has also talked about the elevated valuations in the stock market certain fed governors have talked about price bubbles in commercial real estate which is back before trillion dollars in debt that are sitting on the banks hold and that. commercial mortgage backed securities are or are backed by and so you have various fed governors look at various. pricing or valuations out there and they're discovering and that's died in a study and a half ago and that discovering that after years of key and zero interest rate policy that asset prices have gone out of whack and so they're purposefully trying to lower them that's what that's what it means to tighten financial conditions make make it harder to borrow money bring valuations down a little bit and so they're you know that targeting asset prices with us and that's just by definition so the question is that you asked whether they can do that whether they can low asset prices without causing a lot of mayhem in the markets and i don't know you kn

>> the fed has moved in a decidedly more hawkish way. >> this is the fed saying we are going with thedea that fiscal stimulus is going to overview -- to overheat the economy a bit and we are ready to raise rates to deal with it. >> you could sort of say that the tilt to the risk is are they getting behind the curve? i think it's way too early for that and that's what you've only got three hikes for 2018. we will see where that evolves by june's meeting. >> they might just get four. a close call. given the other uncertainties and trade policy, mr. powell decided to take a cautious course. >> you are new to the job and you want to get through a meeting and a press conference without putting undue expectations in terms of policy shifts coming in the immediate future. jonathan: joining me around the table is oksana aronov, jpmorgan asset management, colin robertson, head of fixed income for northern trust and him into us from london is jim cielinski, global head of fixed income at janice henderson investors. what have we learned about understanding the reaction of fed chair powell? ms. ar

economy is the fed making a mistake. the hot s powell in seat. every note i get permits a different deal with the curve. flat -- dovish, >> jay powell and the fed have expressed they are sensitive to the notion of yield curve inversion. if they move to do too much now, four or five hikes, they are only increasing the risk of that they flatten or reverse the yield curve. this has consequences for the banking sector. the key and we saw that in the language of the last data when they said further, gradual increases, they're not looking to go much faster. hikewill back fill the into the reject three of the -- trajectory of the oncoming years. their signal will be more of the same. >> talk about the fed reaction function. bank of america was asked about the widening light board -- libor spread. we know the answer is technical. when does it start to fundamentally matter in the economy? >> this is classically a gauge of risk in the banking sector. to 2008ake this back and 2009 to say this is a canary in the coal mine. but there are reasons to believe th

the fed --ng tan: did you say the language of the fed? new man in charge of the fed. will there be a change in language, in tune? i think what tan: the fed is going to tout, is the pace of tightening will be gradual, because the u.s. economy is recovering nicely above the potential growth rate. we do not think the fed will be the driver. as long as the u.s. economy grows well, it will not be overwriting its target. it will be a gradual form of monetary tightening. rishaad: thank you for that, director of foreign exchange analyst at ubs. a big push into tech seems to be paying off after a four-year profit. we will be speaking to james garner. this is bloomberg. ♪ ♪ haidi: this is bloomberg markets: asia. i am haidi lun here in sydney. rishaad: in hong kong, i am rishaad salamat it. beating all analyst estimates in its latest earnings report. james garner is the company's chief strategist. he says the company will be pushing more into technology. group isal of pinggao to transform from being a capital driven enterprise to a technology driven

the fed is moving but not in that aggressive of a way. the discussion of trade, as long as china is growing and there's not a disruption in global trade, emerging markets are going to do well. you're getting paid for taking the risk on the debt side. the developed markets are where the rates are too low. and where inflation is coming down, rates are going to move lower. i don't think people factor that in. maria: it's great to see you. rick reider from blackrock. don't go anywhere. don't go anywhere. more "wall street" after but i'm not standing still... and with godaddy, i've made my ideas real. ♪ i made my own way, now it's time to make yours. ♪ everything is working, just like it should ♪ ♪livin in this crazy world ♪so caught up in the confusion♪ ♪nothin' is makin' sense ♪for me and you ♪we've got to give a little love♪ ♪have a little hope ♪make this world a little better♪ there is a lot on tap in the week ahead. let's take a look at the big market events coming up next week that could impact your money. on monday, manufacturing pmi and

conditions which means raising year olds which means by definition falling bond prices so the fed has also talked about the elevated valuations in the stock market certain fed governors have talked about price bubbles in commercial real estate which is back before trillion dollars in debt that are sitting on the banks hold and that. commercial mortgage backed securities are or are backed by and so you have various fed governors look at various. pricing or valuations out there and they're discovering and that's died in a study and a half ago and that discovering that after years of key and zero interest rate policy that asset prices have gone out of whack and so they're purposefully trying to lower them that's what that's what it means to tighten financial conditions make make it harder to borrow money bring valuations down a little bit and so they're you know that targeting asset prices with us and that's just by definition so the question is that you asked whether they can do that whether they can low asset prices without causing a lot of mayhem in the markets and i don't know you kn

jonathan: it's hard to understand when the fed gets behind the curve.e can look at the forecast, 2019 and 2020 and beyond that as well. 2018 at the moment, growth, 2.7%. -- 2.4 is where economists see growth next year and 2.0 the year after that. the trend for is not going to be aggressively higher according to economists we surveyed. henry, do you disagree with that? henry: yes, and that comes with the idea of a shifting narrative. we have been in an environment where you have the right correlations between equity and rates low rates, low inflation, , disinflationary trends, and to dislodge that narrative into a newer one is a process of adjustment and will come in fits and starts. we are going to see some disappointment of data because expectations have gone higher, but we need to shift to a new narrative and it is going to take an adjustment. jonathan: icon up with morgan stanley last week, and essentially the view is as you progress towards the end of the year, the picture best case is going to look like those numbers on that screen than your best c

that's the approach on wall street ahead of the fed decision we'll tell you what to watch straight ahead. >>> facebook fallout shares continue to tumble in the wake of that major data collection scandal new details coming your way. >>> and weather alert again. another major snowstorm is bearing down on the northeast. it's wednesday, march 21, 2018 "worldwide exchange" begins right now. ♪ >>> good morning welcome to "worldwide exchange" on cnbc. i'm dominic chu. >> there's nothing like getting one day into spring and having another nor'easter bearing down on us. >> number four of the season >> the five big things you need to know now. stocks mostly higher as investors add to yesterday's gains. dow futures are up you can see that -- well, no, they're down slightly, a third of a point not the same story for facebook. shares continue to move lower. a group of facebook investors are suing the company over the cambridge analytica scandal. >>> the fed wraps up a two-day policy meeting this afternoon. we'll get the latest decision on interest rates >>> salesforce buying mule so softfsof soft for

will the fed have to move more quickly than anticipated? obviously because the market has been doing so well for so long, there are a number of people saying how much is left on the upside. and is this the time to take some off the table. and final there are some technical reasons that might have driven some of the volatility. >> you oversaw the fed along with allen greenspan and the time of really important for the markets. allen greenspan always looked at the wealth effect. you focused on the wealth effect. as you look back on this last decade where any economic stimulus we talked about was coming from the federal reserve, leaving interest rates at rock-bottom levels. it's time to get out of that, right? >> i think most of would agree it's time for the fed to start the process of normalizing. the question is the pace at which that need to be done. the fed kept interest rates low for longer than many people thought were wise. but today that has paid off in the sense the unemployment rate continued to come down and we haven't seen inflation

it makes sense for the fed not to be too ahead of itself. i think we have got to go back to the point of,w will the four hikes. three or we have got to look at the level of interest rates, not the level of changes. i think looking at where the weight is is key, rather than three or four changes. francine: yeah, financial conditions is still where they were back in 2017, but the problem is, markets anticipate ahead of time and they will be questions here about how sensitive they are as well to a 2% inflation rate, what does he say as far as the sensitivity to the top side? are they willing to accept more than 2%? peter: i think many people would be happy with that. it would start to make people feel a little bit better off. a problem forot any major economy, really. fed's sensitivity as far as markets are concerned, let's face it, their objectives are unemployment and growth and not the market's. and there is a consequence the markets will have to live with whatever the fed gives them and they have profited very well over the fed's stance over

the fed is moving but not in that aggressive of a way. as we get back to the discussion of trade, as long as china is growing and there's not a disruption in global trade, emerging markets are going to do well. you're getting paid for taking the risk on the debt side. the developed markets are where the rates are too low. and where inflation is coming down, rates are going to move lower. i don't think people factor that in. maria: it's great to see you. rick reider from blackrock. don't go anywhere. more "wall street" after how do you win at business? stay at laquinta. where we're changing with contemporary make-overs. then, use the ultimate power handshake, the upper hander with a double palm grab. who has the upper hand now? start winning today. book now at lq.com. when this guy got a flat tire in the middle of the night, so he got home safe. yeah, my dad says our insurance doesn't have that. what?! you can leave worry behind when liberty stands with you™. liberty mutual insurance. racing isn't the only and with godaddy, i'm making my id

man on the fed. so i need to know your opinion. does 2155 require the federal reserve to weaken any of the dodd frank enhanced prudential standards such as deutsche bank or ubs or berkeley? does not according to my reading of the text. >> can you elaborate on how those standards apply? currently, what the bill does is it moves up to 254 the institutions but it looks at the global consolidated capital. iswhat we have now intermediate holding company requirements for these companies and none of those would be affected by this. and what that means is that they are required to keep capital and liquidity in the united states. to be commensurate with the activities. and they are also subject to living wills and things like that. so it is a range of enhanced prudential standards. the holding company is annexed to one. >> enqueue. about somerustrated conclusions about how or what might happen with the international holding company requirements. so to clarify from your perspective, the creation of the ihs was not included in. frank, correct?

we don't do trade policy at the fed. i would be reluctant to comment on any particular situation with any particular country. . >> does the interest rate hike today suggest americans are being paid enough, are you satisfied with the rate of wage growth right now? chair powell: we had unemployment decline sharply since i guess 2010 when it peaked at 10% and down to 4.1% now. we seen only modest increases in wages. wages should in theory represent inflation plus productivity increases. you should get paid for your productivity plus inflation and productivity has been low. inflation has been low. these low wage increases in a sense to make sense in that, from that perspective. on the other hand as the market has tightened rks as labor markets have tight and we hear of labor shortages, we see that, you know, groups of unemployeed are diminishing, unemployment is going down, we haven't seen, you know, high wages. wages going up more. i would, i think, i've been surprised by that. i think others have as well. in terms of what's

how high do the fed fund rates have to go? would argue we are not there yet because it is still below the rate of inflation and so easy conditions. bob: i think the fed has a long way to go. i'm interested to see next week where the summary of economic projections come out. i think the dots will just drift higher. they are behind the curve. it is a negative real yield. they are not interested in normalizing a volcker-esque pace. for us in the markets, that is great. jonathan: you agree to things are great, so what is it in the price? pretty much the consensus is get your treasuries, and if you put that against the yield, i'm wondering if the pain trade might be developing in the short-term. is it stormy weather brewing? bob: where is it? we should have seen it by now. you'd the short position has been built up for a month and a half. why are we not to 50, 260? it is because we have the central banks continuing to run down their balance sheets, particularly the fed. there is an incremental amount of selling going on. you have a